UNSOLD homes and plots on private estates in North Wales will soon be bought up by housing associations to provide more affordable homes for rent.

The move will provide a much needed boost to the beleaguered building trade.

Deputy housing minister Jocelyn Davies announced yesterday £15m of a £42m package of funding would be released over the next two months.

Builders unable to sell homes in the housing slump will be able to offload them to social landlords as a contribution towards the Assembly Government’s target of 6,500 more affordable homes by 2011.

Up to 300 homes could be purchased under the scheme across all 22 counties in Wales, where housing bodies will pick up properties at lower prices than previously the case.

Construction companies had identified the need to sell on properties – some unfinished – during talks with the Assembly Government at recent economic summits, she said.

Ms Davies said she could not guarantee the full target would be met. “We could meet our target, but it’s too early for me to say that we definitely will.”

Ms Davies added: “Our aim was to give a vital stimulus to the construction industry, while also helping the most vulnerable families in Wales. This action has provided a cash flow to the construction industry, keeping people in work and supporting jobs.”

Last November a report from Cardiff Business School warned the credit crunch might force ministers to re-think their target of 6,500 homes. It said social landlords provided 1,533 new homes in 2007/08, but the credit crisis could mean they are not as successful this year.

The deputy minister said the package was a vital part of the Assembly Government’s response to the economic climate, adding: “Housing associations have been given this new money to enable them to make the most of the current economic situation.”

“This cash has allowed them to buy unsold homes and plots from private contractors. This action has provided a cash flow to the construction industry, keeping people in work and supporting jobs.”

One of the first schemes to benefit from this funding will provide homes for seven families acquired by the V2C housing association in Bridgend from Bellway Homes at a cost of £956,800.

The Welsh Assembly Government is providing funding of £554,944 to support the scheme and the association is funding the balance through private finance.